Arizona pays about 14.5¢ per kilowatt-hour for residential electricity and receives about 6.6 kWh per square metre per day of sunlight — 29th and 1st respectively among the 50 states and DC tracked here. Those two numbers set the ceiling on what rooftop solar returns in Arizona, and they point in opposite directions.
Where Arizona sits against the rest of the country
Arizona is 0.3¢/kWh below the median residential rate across this dataset (14.8¢/kWh) and 2.0 kWh/m²/day above the median insolation (4.6 kWh/m²/day). Under this site's standard assumptions, that combination puts Arizona 10th of 51 for modeled payback speed, at 10.4 years against a dataset median of 13.5 years.
What actually drives payback in Arizona
Arizona is sunlight-led: 1st for insolation but only 29th for electricity price. Swap Arizona's sunlight for the dataset median and payback moves to 14.2 years (3.8 years of swing). Swap its electricity rate instead and payback moves to 10.2 years (0.2 years of swing). The sunlight swap is the larger of the two, so how much sun the roof gets is the input deciding the outcome in Arizona.
State incentives on record
Recorded for Arizona: State income tax credit up to $1,000 (Form 310); sales tax exemption on solar equipment; export rates set by utility (APS, SRP, TEP) under approved tariffs.
No federal credit is applied above (Section 25D expired 31 December 2025), and export terms often matter more than the headline rate (net metering guide).
The modeled system, in numbers
At Arizona's sunlight level a 7 kW array produces roughly 13,153 kWh a year, worth about $1,907 in first-year bill savings at 14.5¢/kWh against an assumed $22,400 installed cost. A ten-year payback at this sunlight level would require a residential rate of about 15.3¢/kWh, which is 0.8¢ above what Arizona households pay today.
States with comparable economics
Arizona's closest analogues by modeled payback are New York (10.2 years), New Hampshire (10.1 years), New Mexico (10.8 years). They arrive there from different rate and sunlight combinations, so their incentive rows are the useful comparison.
- New York — modeled payback 10.2 years
- New Hampshire — modeled payback 10.1 years
- New Mexico — modeled payback 10.8 years
Arizona-specific notes
Arizona has among the strongest sunlight in this dataset, but export rates are set by the utility rather than by full retail net metering, and the residential rate sits close to the dataset median. That combination is why the modeled payback is less dramatic than the climate alone would suggest — the model's retail-rate assumption is optimistic for Arizona exporters.